UPM-Kymmene's Interim Review for January-March 2003: UPM-Kymmene's profitability suffers from weak market

Key figures:

- Profit before extraordinary and non-recurring items EUR 115 million (1-3/2002: 217).
- Earnings per share excluding non-recurring items EUR 0.15 (0.30) and including non-recurring items EUR 0.12 (0.29).
- Turnover EUR 2,458 million (2,566).
- Return on equity excluding non-recurring items 4.6% (9.2).
- Return on capital employed excluding non-recurring items 5.8% (9.3).

President and CEO Juha Niemelä comments on the first quarter of the year:

"The market situation in the paper industry has been difficult during the early part of this year and we cannot be satisfied with recent results, which are well below the company's targets. In fact, our primary objective now is to improve our profitability. We will further strengthen free cash flow by curbing investment and enhancing working capital turnover."

"In addition, UPM-Kymmene will intensify its cost savings campaign covering all units and all functions. Cost-effectiveness will be improved and rationalization measures taken. The target is to save EUR 200 million by the beginning of 2005."

"Despite the difficult economic situation our balance sheet has remained good. Over the past year UPM-Kymmene has reduced the net interest-bearing liabilities by EUR 500 million and the balance sheet total by EUR 1,200 million. Gearing at the end of March was as targeted 82%."

"The near-term market outlook for the paper industry remains weak although demand for publication papers is expected to pick up slightly during the second quarter for seasonal reasons. Over the next few months, paper prices are expected to remain unchanged in Europe but to show a marginal improvement in North America," concludes Mr Niemelä.


For more information, please contact:
Mr Juha Niemelä, President and CEO, UPM-Kymmene Corporation, tel. +358 203 15 0001
Mr Kari Toikka, Executive Vice President and CFO, tel. +358 204 15 0014


UPM-Kymmene Corporation
Corporate Communications
April 23, 2003

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Webcasting and Conference Call Information

The news conference regarding the Interim Review will be broadcast on-line at UPM-Kymmene's website www.upm-kymmene.com today at 13:30
Finnish time (11:30 GMT, 6:30 EST). The reply of the news conference will be available until May 7, 2003.

To participate in the UPM-Kymmene Conference Call, please dial +44 (0)20 7162 0184 at 17:00 (Finnish time) (15:00 GMT, 10:00 EST) on April 23, 2003. The access code: UPM-Kymmene. Conference Call can be listened to until April 25, 2003 at the following phone number: +44 (0)20 8288 4459, access code: 536 582.

In the United States and Canada the Conference Call number is +1 334 323 6203, password: UPM-Kymmene. The reply will be heard at the following number +1 334 3236 222, access code: 536 582.